BNY Mellon seeks more time to respond to OneCoin victims’ complaint
Bank of New York Mellon (BNY Mellon) is seeking more time to respond to allegations in a lawsuit brought by victims of fraudulent cryptocurrency scheme OneCoin.
The lawsuit targets OneCoin, as well as a number of individuals and entities associated with the scheme. The list includes, as one might expect, Konstantin Ignatov and “crypto queen” Ruja Ignatova. But the second amended complaint added BNY Mellon to the list of defendants.
On October 21, 2020, BNY Mellon addressed the New York Southern District Court, asking for an extension of the deadline to respond to the allegations. The bank says an extension of time is necessary to provide sufficient time for BNYM and its counsel to review and analyze the 65-page, 280-paragraph complaint, which asserts 11 causes of action against numerous defendants based on allegations spanning a putative four-year-long class period.
While BNY Mellon is not named in every count, the plaintiffs contend that the bank aided and abetted a globe-spanning cryptocurrency fraud, which requires BNY Mellon to review and analyze both the allegations supporting the underlying fraud claim as well as the allegations that the bank purportedly provided substantial assistance to the purported fraudulent scheme.
BNY Mellon requests an extension until December 21, 2020 to answer, move to dismiss, or otherwise respond to the complaint.
Let’s recall that this is a class action on behalf of a class of investors consisting of all individuals and entities who transferred to the OneCoin defendants, directly or indirectly, any fiat currency or cryptocurrency to invest in a OneCoin trader/membership package and/or a purported digital cryptocurrency called “OneCoin” and who suffered financial injury as a result thereof. The financial harm caused by the fraudulent programs exceeds $4 billion.
According to the Second Amended Complaint, seen by FX News Group, the plaintiffs accuse BNY Mellon of aiding and abetting fraud, as well as of commercial bad faith.
According to the plaintiffs, BNY Mellon played a central role in enabling the laundering of more than $300 million worth of OneCoin’s criminal proceeds by:
blindly processing transactions with clear hallmarks of money laundering without conducting cursory due diligence to determine the identities of the persons on behalf of whom such transfers were made;
permitting the Scott Group (one of the co-conspirators of OneCoin) to process more than $300 million worth of OneCoin’s criminal proceeds through its organization over the course of more than 220 transactions and six months before bothering to conduct a minimal internal review into the nature of, and parties involved in, such transactions;
after BNY Mellon’s compliance team’s December 2016 “internet research” into the Scott Group’s numerous transactions indicated the entity was involved with OneCoin and that OneCoin “appears to be operating a pyramid/Ponzi scheme”, declining to impose any restrictions on transactions involving funds originating from OneCoin or its related entities.
According to the plaintiffs’ allegations BNY Mellon either had actual knowledge of the fraudulent laundering of OneCoin’s criminal proceeds through its organization or, at minimum, was complicit in the scheme by turning a blind eye to clear red flags, declining to conduct the bare minimum of due diligence required, and/or refusing to adopt safeguards sufficient to prevent the alleged fraud.
The plaintiffs request that the Court declares BNY Mellon liable to the plaintiffs and the class for aiding and abetting of the OneCoin defendants’ fraud on the class.